Bankers on Wall Street can expect bonuses averaging 15% this year. Corporate financiers will see the biggest percentage increases while fixed income sales and traders will see the lowest.
This is the verdict of Johnson Associates, the Wall Street pay consultancy, based on banks' first half results and forecast performance for the rest of year.
It expects the value of the bonus pool to grow, but with considerable variations across banks and sectors. Corporate finance bonuses should rise 30% or more compared with last year when payouts were particularly low.
Alan Johnson, managing director of Johnson Associates, says, "M&A and equity underwriting pipelines are stronger than in recent past."
Fixed income employees will have a record first quarter to thank for their bonus, but second half contributions are likely to be modest following interest rate rises. Johnson says bonuses are forecast 5% to 10% up on last year's record levels.
Bonuses for equities staff are forecast to rise between 15% to 20% above last year, driven by the strong performance of equity derivatives.
Asset managers can expect bonuses 10% higher on the back of net asset inflows and market appreciation.
The consultancy says Citigroup's bankers can expect some of the most generous bonuses this year; Credit Suisse First Boston can expect some of the worst. Compensation and benefit expenses at CSFB topped 68% of net income during the first half of the year, one of the highest levels on Wall Street. At Citigroup, the comparable figure was just 45%.